Cross-posted from WAMU by Julie Patel and Patrick Madden
Tax-related subsidies increased 24-fold. Data from D.C.’s Office of Revenue Analysis.
No. 1 in the series: Deals for Developers, Cash for Campaigns
CLICK HERE to Listen to the podcast.
A historic mansion in Georgetown, a downtown office building flipped for a record profit and luxury apartments with a car elevator, a block from the White House.
These are among the developments in D.C. receiving tax breaks and discounted public land.
A WAMU investigation found the city awarded $1.7 billion in subsidies to 133 groups in the past decade — and more than a third of the subsidies went to ten developers that donated the most campaign cash over that time. Meanwhile, a fraction of the subsidies went to the city’s poorest neighborhoods.
“By a lot of metrics the District is … the hottest real estate market” in the country, said Tommy Cafcas of Good Jobs First, an economic subsidies watchdog. “So why does the city need to be giving out all of these tax breaks to these major developers?”
On paper, the District has low campaign finance limits: From $500 for most council races to $2,000 for mayoral campaigns. In practice, developers can “bundle” donations through employees, family members and by writing multiple checks to a single candidate through limited liabilities and other affiliates.
Some of the developers said they donate to be civically engaged — not to win favors.
Likewise, city officials said they approve projects not to boost their campaign coffers but because developers pledge affordable housing, jobs and other benefits for taxpayers. But the promises often aren’t enforced, or the subsidies simply weren’t needed.
And what began as a targeted economic development tool, now looks to some like government handouts run amok.
WAMU’s investigation involved examining thousands of pages of city documents on 110 developments receiving city subsidies in the past decade, 133 groups benefiting from the subsidies and campaign contributions for council, mayoral and other local races over that time. It found:
* Groups receiving subsidies donated more than $2.5 million in campaign cash. * The ten developers that donated the most were on development teams that benefit from $641 million – or more than a third of all the subsidies examined. * Nearly half of the donors had multiple affiliates donating and 19 had at least 10. * Less than 5 percent of the subsidies were for projects in wards 7 and 8 — the city’s poorest areas with a fourth of the population. * A dozen developers spent the most campaign cash the year their subsidy was approved and there were 10 dates in which three or more companies developing a project together donated to a single candidate on the same day.
“This is, of course, pay to play politics in gory detail,” Bruce Cain, a political science professor at Stanford University, said after reviewing WAMU’s findings. “I doubt that anyone was so stupid as to be explicit about what was being traded…More likely [the trading] is done with quiet understanding about what is expected of people who want a subsidy.”
Cain added that most D.C. residents “lack both the means and the motive” to donate hefty sums of campaign cash: “This is about a system that forces elected officials to raise private money and the people with the most motivation to give are the people who get direct benefits from the system such as subsidies.”
CLICK HERE to read the rest of the article at WAMU.
